Named Non-Owner Liability Car Insurance in California

Ok- obviously not art related at all, but I’ve looked all over the internet and couldn’t find anything helpful so I thought it might be useful information to put out there.

As some of you know, we are using the car crash as a cue and trying out life without owning a car. Unfortunately, we are not people who don’t need a car at all and so we have been using City Car Share as well as renting cars about 3 days a month. We’re also renting a car for 5 weeks to drive to and around Utah.

We also just learned a couple things about renting a car in California:

1. It’s illegal to drive a car without liability insurance

2. Car rental companies here do not include any state-required liability insurance into the base price of their rental cars. Apparently, California, from what I have read, is the only state where this does not happen. So, if you live in another state and have been buying liability insurance through your rental company, you should know that what you are buying replaces and adds on to what is already included in your rate. I would still check with your specific company to find out if this is true, but it seems to be. We use our credit card for our collision insurance. Again, you still need to check with your credit card to find out what your terms are because they vary a lot. We use Amex Blue (which we specifically got for it’s good rental car coverage)

So- 5 weeks of buying insurance at $13 a day is a lot. What other options are out there, you ask? Well, there are Named Non-Owner policies. These policies are for people who drive either rentals or other people’s cars. It is an insurance plan for the person, not the car. However, you can only do this for cars that you do not own.

The plans seem to range in price quite a bit. So everyone knows: these plans are for two drivers with clean records who have had their licenses for 14 years (ack- oldness). These plans are just for liability insurance.

Geico, to be fair, were the people who even told me that these plans existed and though I owe them that debt, I am not going with their plan. (I was calling around seeing if I could get “temporary insurance” for the 5 weeks we would have the car – the answer is universally “no” just so everyone knows. But, you can open a new policy and then cancel it- though it is hard to do when you have absolutely no information about the car you will be driving.) They offered a 6 month plan for the two of us for $186.80. Not terrible. But, you can’t drive one car or be a regular user of one car for more than 30 days. She offered that to get around this, we would just have to get two different contracts from the rental company. That seemed unlikely.

Travelers insurance seemed incompetent and though they offered the policy, the woman on the other end of the line didn’t seem to understand it, forcing me to tell her what type of car I would be driving though I am renting and don’t know. They never even got back to me with a quote after being on the phone with them for 45 min.

Progressive makes you go through a local agent, so I called Wayne at D Star Insurance in Oakland. (OMG I thought he was awesome, but just found their website. He looks awesome too.) Wayne was very nice and told me about the rental car policies in other states. He mistakenly believed that it was also true in our state, but I found out with a little research that that is not the case. Progressive seems to be the most expensive option. For a 6 month policy for just one of us it was $381. If we wanted to cancel after the 5 weeks, it would be a $50 fee. He included in the quote medical and uninsured motorists, which added $118. Without that it would still be $263 for 6 months for just one of us.

AAA, our old car insurance and our current renters insurance policyholder, won out in the end. Though I called them first, they didn’t tell me about the Named Non-Owner policies. Then I thought I wouldn’t go with them as they only have 1 year policies. But then they gave me a quote for just one of us and it was $141 for the year. After learning about the other plans out there and the problems they posed, I confirmed that they do not have a cancellation fee and they have no limit on the number of days you drive the car, as long as it is not registered to your name. When I called to sign up, I found out that to add Oliver, it was just $4. For the year. So that turned out great. Hooray!

So, if you rent a car once a month in California and usually buy liability insurance through the rental company, I’d advise this plan. It is less per month than one time of buying insurance on a car.

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hey guys,
i am a non-us resident and inquiring with AAA too, to get a non-owner LIS. Hertz charged me 15$/day for the first week of my stay which is ridiculously overpriced.

well, AAA needs to see my records from germany, so while i am trying to get that sorted out, i did some more research, and for everybody who still wants to go with the rental companys insurance, here a tip i read in a lot of forums and which is absolutely true:

DONT BOOK YOUR INSURANCE DIRECTLY WITH THE RENTAL COMPANY OR EVEN AT THE COUNTER.

if you use foreign rental portals, rates including CDW and LIS are around 70% of the quoted direct rates from the rental companyies for LIS only, not even including CDWs.

i tried a big german rental comparison portal and the price for 40 days incl LIS and CDW was around 1300$ whereas the same rental company i ended up with quoted me 2000$ when going through their own homepage.

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Are these policies even needed anymore? I mean, most car insurance policies cover the vehicle (not the driver) anyways. Chances are, if you get behind the wheel of a car, you will be insured. I don’t think these policies are as crucial as everybody makes them out to be.

FYI….I am from California, and are under a similar dilemma. I just called MIS insurance (Matin Insurance Services), a random company I found online, and the agent told me that non-owners insurance only covers non-rental cars (i.e. borrowed cars). He told me that most insurance agents will lie and say you can buy their insurance, but in CA non-owners insurance does not cover rentals..

The thing about non-owners coverage is that you most likely do not even need it. If you are driving your friend’s car, you are most likely insured under their insurance policy. If you are driving a zipcar or a rental car, it will most likely be covered by that company’s own individual policy. Otherwise, your credit card might actually cover it. Non-owners coverage is actually becoming obsolete.

Wow, exactly the info I was looking for after seeing Hertz’s 13,95/day supplemental liability rate which is quite hefty since I want to rent for 1 month.
I’m originally a CA resident, live now out of the country without a car, but drive on occasion when visiting my family in SF.
And by coincidence this summer, I also want to drive to Utah for a camping vacation

I went with AAA, but had to call twice…the first agent was hell-bent on making it as difficult/expensive as possible for me to buy a Named Non-Owner policy, but the 2nd agent had a lot of experience with NNO policies, so it was a breeze, and about half the price (similar to what you were quoted).

Thank you for your post. I too am biking, doing city car share and renting cars on the weekend once a month to avoid actually owning a car in California.

I have been trying to get an answer about liability insurance out of the car rental companies and they vary from “yes we cover the basics” to “no we don’t cover anything.”. I thought it was illegal to not have the basic state required liability insurance, so why is it legal for rental companies to let folks drive the cars off the lot without this protection? Seems crazy.

Well after reading this im still un sure about what i have been wondering, If anybody can tell me does this work if you want to drive you parents car??? and is it for just california or other states too??

I was not required to get a AAA membership, and still have a named non-owner policy through them. I would call back and try to get someone else.

I’m not 100% sure about all the other states, so I don’t want to make any claims there. You’d have to look into that particular states rulings on that. You may be able to find that out by looking through the fine print on the rental car companies website.

When you got the non-owner insurance from AAA, did they require you to also get a AAA membership? They told me I need to get one on top of my non-owner insurance, as they are a member-based organization.

Also: am I assuming correctly that I really only need non-owner insurance when renting in California, but no other state? For example, I am planning to rent a car in Las Vegas for 19 days in April which is the main reason I want to get non-owner insurance. But if it’s already included in Nevada, over the next year I won’t rent much more, so a non-owner insurance woudln’t pay off.

This was very very helpful information, Eleanor. Thank you.
I have been looking for an insurance primarily for rental cars as I rent out often. Have been searching for weeks now…checked with colleagues, Progressive but no luck…until I came across your article.

With AAA, there was initial hiccup…the customer rep had no clue nor his manager….finally called up their branch office and I was all set.

Went there today, 15 mins, and I all set. Since my US license is only from 2008, my premium was 188 (for me and my wife). Still very good.

I wish there was something similar for the rental collision damage as well.
But nevertheless this itself saves a minimum of $12 (enterprise…its $14 for avis) per day rental.

The link above to “a little research” which links to Hertz’s “Qualifications and Requirements” page on “Insurance and other Coverages” only works if you first set a location with Hertz. It doesn’t matter what location you choose in the US because the page of information is the same for all of them.

This page describes three categories of states which have differing laws about what Hertz must do. Those three categories are :

1. California
2. Arizona, Maryland, Massachusetts, Michigan, Minnesota, New York, South Carolina, Virginia, or West Virginia
3. All other US States

The interesting thing here is that California is singled out from every other state. Our laws differ from all other states.

For California :

Hertz provides no liability protection under the terms of the Rental Agreement to the renter from claims of injury by others against you resulting from an accident. Your personal/business insurance may cover your liability.

Hi Eleanor,
Any chance you can send me info on the AAA agent you dealt with? The one I called locally here in San Francisco is telling me that the name, non-owner policy is only good for driving a friend’s car but not for rentals?

Unfortunately, I don’t recall the name of the agent. Probably the easiest thing to do is to start over by calling again and most likely you will get someone else. These policies are pretty uncommon, so many people, even agents, are often unfamiliar with how they work.

So to follow up to this post, as someone who does not have car insurance, i’ve been doing some research on this as well. These named non-owner policies are a good deal for liability insurance if you rent a lot.

Rental car companies are required by law to have some liability insurance as Eleanor says, but I guess they usually have the minimum, and that’s not really enough to cover you if you’re in a major accident, so a non-owner policy is good here, or if you don’t rent that often, the $7-9 a day at the rental counter is something you should probably spring for it seems (this is what I’m going to do – I live in Viriginia and a named non-owner policy was goign to be around $300 for 6 months). For the record, AAA through Progressive was the cheapest for us too.

Also, get your credit card company to send you something in writing about the CDW – there are lots of nitty gritty details on what kinds of cars it covers (many SUVs for instance are not covered).

Lastly, the car rental companies often try to get you to buy ‘personal effects’ insurance or bodily injury – if you have health insurance, you’re already covered.

So as it turns out I’ve been overpaying like crazy for rental cars in the past, but now know that as someone who doesn’t have car insurance and has a good credit card, that the only thing i really need to buy is the liability protection (or named non-owner policy).